DOF remains optimistic on PH economic growth
Despite the 5.2 percent gross domestic product (GDP) growth rate for the first quarter of 2015, the slowest growth pace in three years, the Department of Finance (DOF) remains optimistic on the positive trajectory of the Philippine economy.
With the upcoming Asia-Pacific Economic Cooperation (APEC) 2015 Finance Ministers’ Meeting slated on Sept 10-11, a development road map through the Cebu Action Plan (CAP) that aims to ensure sustainability and enhance inclusive economic growth in the region regardless of various external crises will be the primary agenda of APEC member-economies.
“APEC recognizes the need for member-economies to be proactive. If the region wants to sustain economic progress and to make growth more inclusive, it has to anticipate risks, build cushion against those risks, and implement more development initiatives,” Finance Secretary Cesar V. Purisima said.
The Philippines, which has an average GDP growth rate of 6.3 percent since 1980 and over six percent since 1957, proposes stronger efforts in keeping the positive momentum for Asia-Pacific through the CAP.
The CAP, which targets to safeguard economic gains and let more people benefit from the growth, is composed of four pillars namely, financial integration, fiscal transparency and policy reform, financial resiliency, and infrastructure development and financing.
Financial integration seeks to further link the financial systems of the APEC members through rationalizing regulations on cross-border flow of funds in order to strengthen trade and increase investments.
The fiscal transparency and policy reforms aim to involve the public by making government revenues and expenditures data more accessible. CAP upholds the idea that public scrutiny of the fiscal status of the country will pave way to a more prudent government spending and improved efficiency in terms of utilizing public resources.
Financial resiliency, on the other hand, intends to assist various enterprises and households to withstand financial problems through making insurance products more available and affordable to different sectors, improving urban planning and promoting financial literacy among citizens of APEC member-economies.
Infrastructure development and financing is geared toward enhancing connectivity and mobility within the region. Recognizing the vital and crucial role of infrastructure, the pillar targets to improve access to funds to strengthen business environments and attract jobs that would generate more investments.
Asia-Pacific accounts for 57 percent of global production and is projected to grow by 4.3 percent by the end of the year. With major challenges like natural disasters and volatility in the market, the region sees the need to implement certain measures to ensure economic gains among its members.
The Philippines boasted its pursuit in the public-private partnership (PPP) program for bigger infrastructure projects and the increase in the penetration of micro-insurance products that served as foundations in formulating the measures under the CAP.
Moreover, as part of the Association of Southeast Asian Nations (Asean), the Philippines can further improve its economic status as Asean can potentially be the hub of Asian trade. Asean is number one in terms of electronics export, number two in garments and among the top five in shipbuilding.
The region also supplies 100 percent of the world’s abaca, ranked 12 in automobiles and third in terms of foreign exchange reserves, next to China and Japan.
Meanwhile, the positive performance in the past five years of the Aquino administration was due in part to the strong contribution of the private sector which reflects the heightened interest to invest in the medium to long term growth of the Philippines.
“Increased confidence in the Philippines is a clear result of President Aquino’s unwavering commitment to good governance is good economics,” Purisima said.
In terms of the department’s finances, the Bureau of Internal Revenue (BIR) collected P109.55 billion tax revenues last June, 16.39 percent higher compared in June 2014. Thus, collections for the first half of 2015 totaled to P705.87 billion, a 9.74 percent increase from the P643.21 billion in the same period last year.
The Bureau of Customs (BOC), on the other hand, collected P26.7 billion last May 2015, aggregating a total of P147.1 billion for the first five months of the year. Income from the Bureau of Treasury also amounted to P60.4 billion from January to May, eight percent higher than last year’s figures.
As the governing fiscal body of the country, DOF commits to spend right, following Aquino’s 5Rs --- the right project with the right quality, right people, right time, and the right cost.
“It is not always easy or fast, but growing with the right foundations makes our trajectory more sustainable. We are cognizant of the opportunities ahead and will resolve to boost government capacity to spend at the right pace,” Purisima said.